Treasury cuts incentives for listed securities in Bill
Thursday, June 25, 2020 0:01
By GEOFFREY IRUNGU
Stock traders on the trading floor of the Nairobi Securities Exchange.
PHOTO | DIANA NGILA | NMG
Companies looking to list securities face reduced incentives as the National Treasury pushes to charge tax on all expenses incurred in listing.
In April, the Treasury was able to push through amendments to the income tax whereby incentives such as having companies listing 40 percent of securities pay only 20 percent in income tax instead of the previously standard 30 percent.
“Section 15 of the Income Tax Act is amended in subsection (2) by deleting paragraph s, …” reads the Finance Bill on the securities exchange where the referred paragraphs, respectively, relate to shares listed such as in an initial public offering, securities listed without raising additional capital and expenses on rating by an agency.
“This could also be informed by the fact that sale of securities listed at the stock exchange is currently exempt from Capital Gains Tax and therefore the move to limit further benefit in the form of deductions.”
